Based on the Economic Substance (Companies and Limited Partnerships) Act, 2018, (the “Act”) all BVI entities are mandated to fulfil their obligation on economic substance before 30 December 2020. Firms can conform by submitting information to the BOSS system through its registered agent. The reporting is mandatory, regardless of whether the BVI entities are conducting one of the 9 relevant activities or not. BVI entities claiming the “non-resident” status are also obligated to submit their information.
Applicable reporting obligations on Struck-off firms, unless dissolved
When the Registrar removes a BVI company from the Corporate Register through an administrative procedure, the company is said to have been struck-off. The Registrar may, in certain circumstances, strike a company off the Register of Companies even though it has not been through a liquidation process. A BVI company that has been struck off the companies register and remains continuously struck off for a period of seven years, is deemed dissolved with effect from the last day of that seven-year period. Until the BVI company is dissolved, it still has the obligation to do the annual economic substance reporting. The Act does not exempt struck off companies from fulfilling the requirements on having adequate substance and complying with the economic substance reporting.
If a struck off BVI company is restored on a later date, all fees and penalties incurred by the company while it was struck off will be payable on restoration. This includes the penalties for non-compliance with economic substance requirements. It is therefore recommended that if the company is dormant, the directors should place the company into liquidation to avoid additional fees, penalties and obligations under the Act and other BVI legislation.
